Corporate planning (MNG 106)

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presented by Gerome Amper in MNG 106 subject

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Corporate planning (MNG 106)

  1. 1. CARAGA STATE UNIVERSITY College of Engineering and Information Technology Mining Engineering Program MNG 106 Mine Management Instructor Engr. Rebecca A. Santiago
  2. 2. CORPORATE PLANNING Presentor GEROME L. AMPER BSEM-5
  3. 3. CORPORATE PLANNING
  4. 4. CORPORATE PLANNING “Corporate planning is a systematic approach to clarifying corporate objectives, strategic decision making and checking progress toward objectives. A corporate plan is a set of instructions to managers of an organization describing what role each department is expected to fulfill in the achievement of organization's objectives.” (Gubbins, 2003, p. 98)
  5. 5. CORPORATE PLANNING According to Ron Johnson, Corporate planning often ends with a hastily prepared business plan, prepared to satisfy debt or equity funding sources. While a plan prepared in such a way may meet it's immediate objectives, it is near worthless as a sound operations planning tool.
  6. 6. THE NATURE OF PLANNING There are many instances when managers are overwhelmed by various activities which are at times beclouding his judgment. This must be expected since anybody who is confronted by several situations happening simultaneously will loose sight of the more important concerns. To minimize mistakes in decision- making, planning is undertaken
  7. 7. THE NATURE OF PLANNING A plan, which is the output of planning, provides a methodical way of achieving desired results. In the implementation of activities, the plan serves as a useful guide. Without the plan, some minor tasks may be afforded major attention which may, later on, hinder the accomplishments of activities.
  8. 8. THE NATURE OF PLANNING According to Koontz and O’Donnell, the four basic principles to be dealt with in understanding the nature of planning are: Primacy of Planning: This deals with the importance of planning for its central role in linking all the other managerial functions.
  9. 9. THE NATURE OF PLANNING According to Koontz and O’Donnell, the four basic principles to be dealt with in understanding the nature of planning are: Pervasiveness (to persuade planning) of Planning: This brings out the ideas that planning is a function and responsibility of every manager, supervisor, and foreman in an organization.
  10. 10. THE NATURE OF PLANNING According to Koontz and O’Donnell, the four basic principles to be dealt with in understanding the nature of planning are: Contribution to Objectives: Plans are means to achieve some ends and without planning, we can not achieve goals and objectives of an organization. .
  11. 11. THE NATURE OF PLANNING According to Koontz and O’Donnell, the four basic principles to be dealt with in understanding the nature of planning are: Efficiency of Planning: Least costly and more beneficial.
  12. 12. PLANNING DEFINED Planning, according to Nickels and others, refers to “the management function that involves anticipating future trends and determining the best strategies and tactics to achieve organizational objectives.” This definition is useful because it relates the future to what could be decided now.
  13. 13. THE NATURE OF PLANNING The definition of Cole and Hamilton provides a better guide on how to effectively perform this vital activity. Planning, according to them is “deciding what will be done, who will do it, where, when, and how it will be done,” and the standards to which it will be done.”
  14. 14. PLANNING AT VARIOUS MANAGEMENT LEVELS  Strategic Planning  Intermediate Planning  Operational Planning
  15. 15. Strategic Planning The term strategic planning refers to the process of determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals. The top management of any firm is involved in this type of planning.
  16. 16. Strategic Planning In strategic planning, the whole company is considered, specifically its objectives and current resources. The output of strategic planning is the strategic plan which spells out “the decision about long-range goals and the course of action to achieve these goals.”
  17. 17. Strategic Planning MANAGEMENT LEVEL PLANNING HORIZON Top Management •Chief Executive Officer ( CEO ) •President •Vice President •General Manager Strategic Planning (one to ten years)
  18. 18. Intermediate Planning Intermediate planning refers to “the process of determining the contributions that subunits can make with allocated resources.” Under intermediate planning, the goals of a subunit are determined and a plan is prepared to provide a guide to the realization of the goals. The intermediate plan is designed to support the strategic plan. This type of planning is undertaken by middle management.
  19. 19. Intermediate Planning MANAGEMENT LEVEL PLANNING HORIZON Middle Management •Functional Managers •Product Line Managers •Division Heads Intermediate Planning (six months to two years)
  20. 20. Operational Planning The term operational planning refers to “the process of determining how specific tasks can best be accomplished on time with available resources.” This type of planning is a responsibility of lower management. It must be performed in support of strategic plan and the intermediate plan.
  21. 21. Operational Planning MANAGEMENT LEVEL PLANNING HORIZON Lower Management •Unit Managers •First Line Supervisors Operational Planning (one week to one year)
  22. 22. The Strategic Planning Process 1. MISSION AND OBJECTIVES The mission statement describes the company's business vision, including the unchanging values and purpose of the firm and forward-looking visionary goals that guide the pursuit of future opportunities. Guided by the business vision, the firm's leaders can define measurable financial and strategic objectives.
  23. 23. The Strategic Planning Process 2. ENVIRONMENTAL SCAN Includes the following components: a. Internal/External Analysis of the firm b. Analysis of the firm's industry c. External macro-environment
  24. 24. The Strategic Planning Process
  25. 25. SWOT Analysis A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W), and those external to the firm can be classified as opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as a SWOT analysis.
  26. 26. SWOT Analysis The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection.
  27. 27. SWOT Analysis Strengths A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Weaknesses The absence of certain strengths may be viewed as a weakness.
  28. 28. SWOT Analysis Opportunities The external environment analysis may reveal certain new opportunities for profit and growth. Threats Changes in the external environmental also may present threats to the firm.
  29. 29. SWOT Analysis To see example of SWOT Analysis, click link below:
  30. 30. SWOT Matrix A firm should not necessarily pursue the more lucrative opportunities. Rather, it may have a better chance at developing a competitive advantage by identifying a fit between the firm's strengths and upcoming opportunities. In some cases, the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity.
  31. 31. SWOT Matrix Strengths Weaknesses Opportunities S-O Strategies W-O Strategies Threats S-T Strategies W-T Strategies
  32. 32. SWOT Matrix S-O strategies pursue opportunities that are a good fit to the company's strengths. W-Ostrategies overcome weaknesses to pursue opportunities. S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external strengths. W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats.
  33. 33. PEST Analysis S-O strategies pursue opportunities that are a good fit to the company's strengths. W-Ostrategies overcome weaknesses to pursue opportunities. S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external strengths. W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats.
  34. 34. PEST Analysis PoliticalP EnvironmentalE SocialS TechnologicalT A scan of the external macro-environment in which the firm operates can be expressed in terms of the following factors:
  35. 35. PEST Analysis Political Factors Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Examples: Tax policy Employment laws Environmental regulations Trade restrictions and tariffs Political stability
  36. 36. PEST Analysis Economic Factors Economic factors affect the purchasing power of potential costumers and the firm's cost of capital. Examples: Economic growth Interest rates Exchange rates Inflation rate
  37. 37. PEST Analysis Social Factors Social factors include the demographic and cultural aspects of the external macroenvironment. These factors affect consumer needs and the size of potential markets. Examples: Health consciousness Population growth rate Age distribution Career attitudes Emphasis on safety
  38. 38. PEST Analysis Technological Factors Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Examples: R&D activity Automation Technology incentives Rate of technological change
  39. 39. The Strategic Planning Process 3. STRATEGY FORMULATION Given the information from the environmental scan, the firm should match its strengths to the opportunities that it has identified, while addressing its weaknesses and external threats.
  40. 40. The Strategic Planning Process 4. STRATEGY IMPLEMENTATION The selected strategy is selected is implemented by means of programs, budgets and procedures. Implementation involves organization of the firm's resources and motivation of the staff to achieve objectives. The way in which the strategy is implemented can have a significant impact on whether it will be successful.
  41. 41. The Strategic Planning Process 5. EVALUATION AND CONTROL The implementation of the strategy must be monitored and adjustments made as needed. Evaluation and control include the following steps: 1. Define the parameters to be measured. 2. Define target values of those parameters. 3. Perform measurements. 4. Make necessary changes.
  42. 42. 2 b continued… THANK YOU !

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